Fidelity Bank, the area’s third-largest bank by deposits, recorded a $6.65 million loss in the three-month period ending March 31.

Bank chairman and CEO Clark Bastian on Wednesday attributed the loss to the sale of $70 million in mortgage-backed securities.

The loss was recorded on Fidelity’s March 31 call report that it filed with federal regulators. Fidelity has $1.5 billion in assets.

Bastian said Fidelity sold the securities because it saw “a market opportunity” to get a better price for them in mid-March.

The mortgage-backed securities market took a hit in the 2008 financial crisis because some mortgage securities were packaged with subprime mortgages. When the housing bubble burst, causing home values to plummet, the value of mortgage-backed securities plummeted too.

“We bought these, I think … probably between 2004 and 2007,” Bastian said. “They were all rated triple-A and double-A, the highest grades.”

Bastian said the bank could have continued to hold on to the securities but that it could be years before it would see a gain on the investment in them, and even then there might not be a gain.

“There’s a lot of uncertainty about these securities, and we decided we didn’t want to see how they amortized out,” he said.

The securities Fidelity sold were on mortgages that were good, that homeowners were continuing to pay on.

“But we didn’t want to wait years and years,” he said. “We decided we would rather put our dollars into making loans in Wichita, growing businesses.”

He said the sale of the mortgage-backed securities represented a “good part” of Fidelity’s investment in mortgage-backed securities and that it has reduced its investment in them to a level “that we’re comfortable with.”

Bastian pointed out that the sale of the mortgage-backed securities has improved Fidelity’s three capital ratios that regulators use to determine a bank’s safety and soundness. Its Tier One risk-based capital ratio as of March 31 was 15.18 percent compared with 14.09 percent in the quarter ended December 31, 2011, according to Federal Deposit Insurance Corp. data. Fidelity’s total risk-based capital ratio also improved to 16.23 percent compared with 14.96 percent in the quarter before.

While Bastian said he’d rather not record a quarterly loss, “I really view this as a good thing.”

“It really positions us to do more lending in Wichita and get those assets off the books.”